Post by : Badri Ariffin

OpenAI has sealed a $38 billion agreement with Amazon to operate its AI workloads on Amazon Web Services (AWS) within U.S. data centres. The arrangement marks a significant realignment in cloud infrastructure and follows OpenAI's recent changes to its earlier cloud relationship with Microsoft.

Under the terms, OpenAI will access "hundreds of thousands" of specialised Nvidia AI accelerators hosted by AWS, a capacity boost intended to scale services such as ChatGPT for its millions of users worldwide. Amazon's stock jumped about 4% after the announcement, reflecting investor confidence in the tie-up.

The timing coincides with OpenAI's corporate overhaul: regulators in California and Delaware approved a reworked business structure that enables the company to raise capital and pursue profits more readily. Founded originally as a non-profit, OpenAI has been channeling vast sums into infrastructure — reportedly more than $1 trillion — via collaborations with Oracle, SoftBank and chip partners such as Nvidia, AMD and Broadcom.

OpenAI has said it will begin using AWS computing resources immediately, with most of the contracted capacity expected to come online by the end of 2026 and the option to expand further into 2027 as demand dictates.

The agreement also reinforces Amazon's role in the AI cloud market, where it already hosts rival startups such as Anthropic. The move underscores intensifying competition among cloud providers as organisations race to secure advanced infrastructure for AI development and deployment.

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